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A real termination could be offered to clear up the confusion.

What does this mean? Which information? Trust records? Payroll? Employer records? Why isnt it available? Not available is rather vague. Have they done all the possibly can do? Is cost a factor? Like Bill, I have always been able to get what I need in the end, but some of them werent pretty. I even had a client who had several decades of records destroyed in an explosion manage to get their audit done after considerable effort and expense.

Good point, CB. I knew we kept you around for a reason.

Many documents restrict the deferral amount to 92% of pay for just this reason. But my answer is that you can't defer money that you can't receive, and since the SS is mandatory, there's no option to receive $5,000, hence you can't defer it. For me, what passes as common sense. Doesn't mean I'm right...

It is not so obvious to me. Why is it obvious to you?

Official numbers are out. Results are what was expected. https://www.irs.gov/pub/irs-drop/n-21-61.pdf

Yikes. I've had plans that had to go back for audits, but we're always able (eventually) to get an opinion even with lots of caveats and disclaimers. Perhaps talking to a different audit firm would help? Perhaps one that exclusively does ERISA plan audits?

Thanks @Bill Presson. Unfortunately we are the ERISA attorneys. We originally proposed filing an incomplete report with explanation. However, after discussions with a help desk agent at the DOL (take that for what it is worth), they informed us that the only options were to file the auditor's report (completed) or undue the plan as the plan could never be in compliance since an auditors opinion couldn't be produced for earlier years, therefore there was no way to substantiate any numbers in any subsequent 5500s.

^ I agree

BG5150, see below for a different take. I think in substance there are two loans, but you can call them one. If the plan says (a) you can only have one loan, but (b) you can refinance, then I think the refinancing paperwork could, which would say "refinancing paperwork" (in effect) at the top of the document, or obviously could be electronic, would say the existing loan is being turned into a loan that will go out five years from the date of the refinance, and will be for an amount equal to the old loan plus some extra, but only the extra gets disbursed as new cash. As long as the new cash amount could have been done as a second loan, you should be OK. At least that's the way I read the reg.

Well-drafted plan documents will expressly provide for the plan administrator (the fiduciary one) to have authority to interpret the plan. Best practice is for the plan administrator to memorialize the interpretation of the plan terms for administering an elective deferral that exceeds the available amount net of all other deductions and elective reductions from gross compensation, if the plan documents otherwise do not adequately deal with the priority. Make sure to be comprehensive. E.g., determine where elective deferrals stand relative to section 125 elective reductions. If the interpretive authority is not express, it is implicit in the law, and increases the importance of the fiduciary's assertion and memorialization of the authority and the interpretation.

If there are excess assets or other amendments that increase the owner's benefit you could have a discriminatory increase in the owners benefit with respect to timing if they all go to the owner. Annually for 401(a)(4) and 401(a)(26) you are fine with the owner as the only employee.

Thank you for the cite as I was not searching using "overpayment". Section 5.01(3)(c) clearly provides the explanation of what is an overpayment is. Section 6.06(4) provides reference to Appendix B, section 2.04(c)(2) provides reference to Appendix B section 2.04(1)(c) Just confirming the sections. Very clear.

Google "sham termination". It is edifying.

That's not how my interpretation on how refinancing plan loans works. The first loan does not get repaid, but merely gets absorbed into the new, 'refinanced' loan. That is how you get around the thorny two-loan problem. If the plan only allows for one loan, you would not be able to take a second loan in order to pay off the first. With refinancing, there are never two loans at the same time. But, under the rules, the amount outstanding from that first loan must be paid off no later than 5 years after its origination.

The wife has to get at least some of PS contribution, otherwise her comp wouldn't be included in the calculation of the deductible limit. Catch-up contributions are not included in applying the 415 limit. So the wife can defer $26,000, then get a PS contribution of up to $30,000 - $19,500 = $10,500.

I believe the section you are looking for is 1.415(c)-1(b)(6)(B), which says that in order for a contribution to count as an annual addition, it has to be made "no later than 30 days after the end of the period described in section 404(a)(6) applicable to the taxable year with or within which the particular limitation year ends." Assuming that limitation year = plan year = calendar year, then 2020 limitation year ends on 12/31/2020, which is within B's 7/1/2020-6/30/2021 tax year, and the 404(a)(6) period for that tax year would end on 9/15/2021, extensions notwithstanding. You may also find 1.404(a)-14(c) relevant, which talks about how to determine the deductible limit when the tax year is different than the plan year.